The United Auto Workers union expanded strikes against Detroit automakers Friday, ordering 7,000 more workers to walk off the job in Illinois and Michigan to put more pressure on the companies to improve their offers.
It was the second time the union has widened the walkouts, which started two weeks ago at three assembly plants before the most recent addition of a Ford plant in Chicago and a General Motors factory near Lansing.
Union President Shawn Fain told workers in a video appearance that the strikes were escalated because Ford and GM refused “to make meaningful progress” in contract talks. Jeep maker Stellantis was spared from the third round of strikes.
Ford and GM shot back as a war of words with the union also intensified. Ford accused the UAW of holding up a deal mainly over union representation at electric vehicle battery plants, most of which are joint ventures with a Korean manufacturer.
“We still have time to reach an agreement and avert a real disaster," Ford CEO Jim Farley said. The company said the work stoppages are starting to affect fragile companies that make parts for the factories on strike.
General Motors CEO Mary Barra blamed union leaders for the impasse.
“UAW leadership continues to expand the strike while upping the rhetoric and the theatrics. It’s clear that there is no real intent to get to an agreement,” Barra said in a statement.
The GM plant in Delta Township, near Lansing, makes large crossover SUVs such as the Chevrolet Traverse. A nearby metal parts stamping plant will remain open, Fain said.
The Chicago Ford plant makes the Ford Explorer and Explorer police interceptors, as well as the Lincoln Aviator SUV. The Explorer interceptor is the nation's top selling police vehicle.
Fain said union bargainers are still talking to the companies, and he was hopeful they could reach deals.
Stellantis, he said, made significant progress Friday by agreeing to unspecified cost-of-living raises, the right not to cross a picket line and the right to strike over plant closures.
Raneal Edwards, a longtime GM employee who works at the Lansing-area factory, said she was “shocked but happy” to hear that her plant would join the strike.
“I feel like they don’t understand that this is about more than wages,” Edwards said. “It’s about having security at our jobs.”
Edwards said the UAW’s strategy of slowly adding more plants will work. "I love it because it keeps us on our toes. No one knows what’s next,” she said.
But in a note to workers Friday, Edwards' boss, GM manufacturing chief Gerald Johnson, said the company has yet to receive a counteroffer from union leaders to a Sept. 21 economic proposal.
Automakers have long said they are willing to give raises, but they fear that a costly contract will make their vehicles more expensive than those built at nonunion U.S. plants run by foreign corporations.
Ford's Farley accused the union of holding an agreement hostage over union representation of battery plant workers. On a conference call with industry analysts, he said high wages at battery plants would raise the price of Ford’s electric vehicles above those from Tesla and other competitors.
“Record contract? No problem. Mortgaging our future? That’s a big problem. We will never do it,” Farley said.
Ford's battery plants, Farley said, have not been built. “They have not been organized by the UAW yet because the workers haven’t been hired and won’t be for many years to come,” he said.
Fain later accused Farley of lying and said the union gave Ford a counteroffer Monday but has not heard back. He stressed that there is no impasse, although they're far apart on economic issues such as defined-benefit pensions for all workers and health insurance for retirees.
"We’ve had good discussions. There’s times we think we’re getting somewhere, and then things just stop,” he said. Fain also said “job security in the EV transition” remains an issue.
The union insists that labor expenses are only 4% to 5% of the cost of a vehicle, and that the companies are making billions in profits and can afford big raises.
Wedbush analyst Dan Ives said the expanded strikes show both sides are digging in for a potentially long battle.
Ives wrote in a note to investors that President Joe Biden's administration is watching union demands collide with his push for cleaner electric vehicles. Biden, who has billed himself as the most union-friendly president in history, traveled Tuesday to the Detroit area to walk picket lines with workers at a GM parts warehouse.
Republican front-runner Donald Trump also traveled to the Detroit area this week for a rally at a nonunion parts maker.
Offers on the table from the companies will add $3,000 to $5,000 to the cost of an average electric vehicle that would be passed on to consumers, Ives wrote.
The electric vehicle battery plants are a huge issue for the union's future. Some industry executives, including Farley, say building EVs will take up to 40% fewer workers because they have fewer parts. So the union is looking to organize battery plants and win top wages so displaced workers have somewhere to go, especially those making combustion engines.
Other industry officials, including GM CEO Mary Barra, say there will be enough jobs for all as the industry moves away from gasoline vehicles.
The automakers' last known wage offers were around 20% over the life of a four-year contract, a little more than half of what the union has demanded. Other contract improvements, such as cost of living increases, restoration of defined benefit pensions for newly hired workers and an end to tiers of wages within the union are also on the table.
The union went on strike Sept. 15 when it couldn’t reach agreements on new contracts with the companies. Contracts expired at 11:59 p.m. Sept. 14.
The UAW initially targeted one assembly plant from each company. Last week it added 38 parts distribution centers run by GM and Stellantis. Ford was spared the second escalation because talks with the union were progressing at that time.
The union has structured its walkout in a way that has allowed the companies keep making pickup trucks and large SUVs, their top-selling and most profitable vehicles. Previously it shut down assembly plants in Missouri, Ohio and Michigan that make midsize pickup trucks, commercial vans and midsize SUVs, all of which are profitable but don’t make as much money as the larger vehicles.
The new strikes against GM and Ford target crossover SUVs that are big money makers for both companies.
In the past the union had picked one company as a potential strike target and reached a contract agreement with that company that would serve as a pattern for the others.
But this year Fain introduced a novel strategy of targeting a limited number of facilities at all three automakers, while threatening to add more if the companies do not come up with better offers.
About 25,000 of the union’s 146,000 workers at the three automakers are on strike, allowing it to preserve a strike fund that was worth $825 million before Sept. 14.
If all of the union’s auto workers went on strike, the fund would be depleted in less than three months, and that’s without factoring in health care costs.
